Lloyds Banking Group (LSE: LLOY) shares have had a rocky couple of weeks because the US fired a salvo of tariffs at its key buying and selling companions around the globe.

The Lloyds share price has been transferring up and down virtually as shortly because the phrases from the White Home have been altering.

Forecast uncertainty

It makes issues difficult for personal traders. And it’s good to do not forget that the Metropolis’s skilled analysts don’t actually have it any simpler at instances like this.

Forecasts for the present yr put Lloyds shares on a price-to-earnings (P/E) ratio of about 10.5. In regular circumstances I’d see that as low-cost. I count on banks to be valued extra lowly than the FTSE 100 common in robust financial instances, as they’ll’t actually do something aside from sit there and take the hit. However that is perhaps too little.

Is it decrease due to the chance from the automotive mortgage mis-selling case on the Supreme Court docket? I’m positive it’s, however I don’t know by how a lot. I’d presume the brokers have allowed for the £1,150m the financial institution has already put aside.

What number of have allowed for additional harm, to cowl fears that the case might price much more than that? It’s inconceivable to inform. However of their place I’d be decreasing my outlook to a point based mostly on the worst case.

Unknown unknowns

How a lot of the US tariff uncertainty has been included within the present Metropolis outlook? I’d suspect none but, as it could possibly take weeks for them to work out their new projections and set new targets. Or determine which finger to stay within the air this time, relying on one’s tackle their strategies!

The one factor I’m positive of is that I’ve no concept what the Trump administration will come up with subsequent. And by no means thoughts the solutions to any questions, I don’t even know what the following questions is perhaps.

With all this uncertainty, I’d need to see a valuation for Lloyds that leaves a good bit of security margin. And it truly is perhaps there.

Forecasts see earnings per share (EPS) rising sufficient in 2026 to take the P/E down to below eight. And for 2027 we see forecasts dropping it to six.5. Except issues go catastrophically fallacious, that might make the present share price turn into a steal.

What can go fallacious?

The difficulty is, the UK’s banks appear to be adept at pulling a recent disaster out of the bag when it’s least anticipated. I’ve modified from hoping there’ll by no means be one other mis-selling scandal to questioning what the following one is perhaps.

With a lot within the air, I’m not stunned some analysts have moved to Maintain from Purchase on Lloyds. I echo them. Proper now, I intend to carry my Lloyds shares. And I gained’t think about shopping for extra till not less than July. That’s the soonest the Supreme Court docket mentioned to count on its judgement.

The consensus price goal stands at 76p, simply 8.6% forward of the price on the time of writing. It appears they’re not anticipating a lot short-term share price motion.